Kicking the Medicare Can -- Again

Kicking the Medicare Can -- Again

by Michael D. Tanner

Michael Tanner, a Cato Institute senior fellow, is co-author of Healthy Competition: What's Holding Back Health Care and How to Free It.

This article appeared in The New York Post on December 13, 2010.

While much of Washington was focused on the tax compromise be tween President Obama and congressional Republicans, the Senate was putting together another deal that shows how little both parties really understand what happened in the last election.

Senate Democrats and Republicans agreed on — and passed by a vote of 99-0 — a one-year extension of the so-called "doctor fix" for Medicare. The result is almost certainly going to mean higher deficits and more debt piled on the backs of our children.

The entire conundrum is an artifice of the way Congress does business.

...

But wait. Congress found a way to pay for it: It voted to reduce subsidies under the president's health reforms — in 2014.

That's right. Congress will spend the money next year, but you needn't worry because it will reduce subsidies four years from now.

Well, it's not really going to reduce the subsidies. What members actually voted for was a requirement that people who get the subsidy incorrectly because their incomes changed during the year (making them ineligible) will have to repay a larger portion of the subsidies that they shouldn't have received in the first place.

Under the ObamaCare law, any individual receiving a greater tax subsidy than he was really eligible for only had to repay $250 of that overpayment; families would have to repay up to $450. Now the repayments top out at $600 to $3,500, depending on income.

So, four years from now, the government will pay people money that it shouldn't. Those people will then repay part of this money. And Congress will use that repayment to repay the money it borrowed to spend this year to avoid making cuts in a program that is trillions of dollars in debt.
Feeling better now?

If November's election meant anything, it was that the American people were fed up with business as usual in Washington. If this latest Senate deal tells us anything, it's that business as usual is alive and well.

- rest at www.cato.org/pub_display.php?pub_id=12629